And Kevin, after chatting a few times on various National Review cruises over the years, thanks for stopping by today.

MR. WILLIAMSON: Hey, thank you. How are you doing?

MR. DRISCOLL: Oh, not too bad. Kevin, there's two statements implicit in your book's title. So let's unpack them one by one, beginning with the first half of the title. How soon is the end, and how cataclysmic will the earth-shattering fiscal kaboom be?

MR. WILLIAMSON: Well, it's hard to say exactly. You know, if you look at -- if you measure what the federal government does by spending, if you look where it actually spends its money, a little bit more than eighty percent of all spending right now is on three things, essentially. It's on entitlements. It's on national defense. And it's on interest on the debt. And the biggest piece of that is entitlements, by a long shot.

If you look at the fiscal overhang on the entitlements, which is to say, the money we'd need to have in the bank right now to make those work in the long term, you're talking about a number like 100 trillion dollars, maybe a little bit more. It depends on the assumptions you use to calculate it.

That happens to be more than GDP of the whole planet, and it's roughly equivalent to all of the non-real estate assets in existence. So the idea that we're going to somehow hijack a sum equivalent to the wealth of the planet in order to make Social Security, Medicare, and Medicaid balance outright, is just crazy. It's not going to happen.

Interest on the debt, of course, is a function of the other spending. And then defense accounts for about nineteen percent of the budget.

So if you assume that the entitlement state is -- is just simply, mathematically speaking, unsustainable, and that federal spending which, you know, right now we're running a forty-one percent deficit for the last several years, is also unsustainable, then about, you know, seventy or eighty percent of what the government does is going to have to undergo some sort of radical change in the near future.

Now, that could be a -- you know, a short, sharp Argentina-style event. Let's hope not. It could also be a series of incremental but serious and deep reforms, starting very soon. And I think the main challenge for us going forward, for our generation, for the next ten years, is how to get from where we are to where we're going to be in the least disruptive manner. And that's part of what my book's about.

MR. DRISCOLL: And that sort of dovetails into the second half of your book’s title, which is picked up by its subtitle. The End is Near and It's Going to Be Awesome: How Going Broke Will Leave America Richer, Happier, and More Secure. That sort of sounds like addition by subtraction.

MR. WILLIAMSON: In a sense. You know, one thing I hate about our political discourse is this, you know, sort of rhetoric of scarcity we have going on. I mean, scarcity is a real thing. That's why it makes economics work. I'm not talking about scarcity in that abstract sense. I'm talking about scarcity in the colloquial sense of privation. We aren't poor. You know, we're a really, really rich society. And the rest of the world keeps getting richer, which is very good for us, because we make high-end stuff. It's hard to sell stuff -- the sort of stuff that we make to poor people.

You know, there are countries like China that make sort of low-priced, low-margin products -- although China's moving away from that -- India, Bangladesh, Vietnam, places like that. You know, we make Apple products. We make Boeing airlines. You know, we make that sort of thing. You don't sell that to poor people; you sell that to rich people.

So I'm, you know, in the long term, very optimistic about our -- about our economic outlook, although I'm pessimistic about the short term. I think there'll be some disruption and some genuine unhappiness. So a lot of the things that we look to the federal government to do, particularly to provide for things like education, to provide for healthcare for people who, for one reason or another, can't provide for it for themselves, and to organize retirement savings for people, we do a terrible job of that through the federal government.

And the sooner the systems go bankrupt and broke and get pushed to the side and replaced with productive volunteering alternatives, based on real accumulation of capital and real productivity and real assets, the better off we'll be.

You know, we've got more than enough resources right now to provide a real first-rate education to every kid in this country who wants one. You know, college -- or kindergarten through grad school. We've got the resources to do that. It's not that expensive. It's not that difficult. We've got a great big political apparatus standing in the way.

We've got the resources to allow people to save and invest for their own retirements, to an extent that most people could retire with incomes very similar to what they had when they were working. But we take twelve and a half percent of their incomes out and throw it into the entitlement black hole, and it just goes away. You know, it's a terrible deal for a lot of people. And it's a super unproductive system. Plus, it takes all that capital out of circulation as well, and keeps it from going to productive uses.

You know, the same thing with healthcare. Healthcare is a little bit more of a challenge, because you've got a slightly more complex universe of providers and services there than you do in, say, kindergarten through twelfth grade education. But for those things that we really, for the last thirty years, forty years, sixty year, have looked to the government increasingly to provide, we can do much better without the government.